Great change in UK crypto regulations – Retail access to upcoming Bitcoin products?

The UK may ultimately ease the grip of crypto investment products. After banning retail access to Crypto Exchange-Traded Notes (CETNS) in 2020, the Financial Conduct Authority (FCA) is currently proposing to lift the ban. If approved, UK daily investors can trade regulated products exposed to cryptocurrencies such as Bitcoin and Ethereum through their official trading platforms.

This move is due to the continued growth of global interest in crypto investment products. Earlier this year, the US approved several spot Bitcoin ETFs. This has already attracted billions of investments from both facility buyers and retail buyers. The UK is currently under pressure to stay behind.

According to the industry, ETFs are:

Cryptouk, one of the nation’s leading industry groups, welcomed and revealed the FCA’s decision, but this should be just the beginning. In their official response, they argued that crypto (exchange trade funds) is a more secure and familiar option for most investors compared to holding crypto directly. ETFs avoid self-reliant risks, often with low fees and are already widely used in traditional finance.

Companies like 21Shares and Coinbase UK have reflected that sentiment and urged regulators to go beyond CETN. They pointed out that limiting access could increase risk instead of reducing the risk as investors are heading towards unregulated offshore exchanges.

Additionally, product publisher 21 shares also supported wider access, warning the FCA against circulars that were smaller enough to push UK savers back to unregulated offshore platforms. Coinbase UK’s Keith Grose called the UK the “second mover” advantage player. By learning from successful models in the US and Europe, the UK can implement a clearer framework for regulated cryptographic products. But they also warn that DELAYS could put the UK further behind countries like Germany and Switzerland.

What does this mean for cryptography?

The UK FCA is considering whether retail investors will have access to notes (CETNs) traded on crypto exchanges. Key decisions include whether to extend beyond Bitcoin and Ethereum, and whether the Spot Crypto ETF can follow. For now, CETNS may provide a regulated way for UK savers to be exposed to cryptography without processing their private keys. However, both regulators and the industry emphasize that risk remains high and there is a possibility of complete losses due to volatility.